For the past 70 years Orange people have enjoyed eating Middletons milk ice blocks.
However the Hill Street company has been forced to stop production after it was unable to source full cream milk powder in Australia.
While the company will continue to make water ice blocks owner Dick Middleton said it was a major blow.
Mr Middleton revealed on Friday there was a shortage of the milk powder in Australia following widespread problems in the dairy industry.
“It’s totally out of our control,” he said.
“Last year we couldn’t get the milk at all in Australia, it came from New Zealand.
“I’ve been talking to [suppliers] Murray Goulburn and Tatura and a distributor in Sydney.
“They said there is none available in Australia.
“The only place you can get milk is Europe and China.
“When I looked at China it would be up to three times the cost.
“We’ve been paying $2500 for 20 bags of [25 kilogram] powdered milk.”
However, Mr Middleton said the Chinese price may have been as high as $7000 for the same product.
That would have meant the cost of the milk ice blocks would be too expensive.
“The biggest disappointment for us is the older people coming in asking for the milk ice blocks,” he said.
“They have been eating them for years.”
Mr Middleton said they had supplied milk ice blocks to two Orange primary schools as part of their overall school supply but that had stopped.
He said that if they could source milk powder at the right price they would be able to re-start production.
“We could always start up tomorrow,” he said.
Mr Middleton said successive governments had not looked after local industry.
“I blame the politicians,” he said.
“They are too busy selling the country off to overseas.”
The Middletons took over the business from Max Muir about 35 years ago.
When the news broke people turned to social media saying they would pay more for the milk ice blocks.
A spokeswoman for Murray Goulburn said that due to reduced milk intake from farmers and the impending closure of its main full cream milk powder factory in Victoria, it could not supply milk powder to Middletons.